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National egg shortage expected until Christmas

MARK COLVIN: Australians may have to shell out more for eggs because of a national shortage.

And the problem is a hard one to crack, with an undersupply of six million eggs a week expected to last until after Christmas.

Egg farmers say consumer demand has increased by 20 per cent in the last four years and they've been scrambling to keep up.

Jennifer Macey reports

(Sound of chickens)

JENNIFER MACEY: The chickens are laying, but not fast enough to keep up with the consumer's appetite for eggs.

JOHN O'HARA: My best estimate of under supply is probably around about half a million dozen eggs per week and it may even be as high as a million dozen eggs per week.

JENNIFER MACEY: John O'Hara is the Chief Executive Officer of Sunny Queen Eggs one of the country's big producers.

He says the farmers expected to have an oversupply of eggs this year and have now been caught short.

JOHN O'HARA: Industry data that gives us forward estimates and the forward estimates actually had us in a major oversupply at this time of the year, but I think what people will see is they will find holes in where they shop for their eggs and you'll see gaps on the shelf. There will be eggs there, but it just means that they may not necessarily get the choice that they want when they want it.

JENNIFER MACEY: The Australian Egg Corporation estimates that demand for eggs has increased by 20 per cent in the last four years.

The Managing Director James Kellaway says that's due to a change in the dietary guidelines put out by the Heart Foundation .

The Heart Foundation now recommends eating six eggs a week rather than just two.

JAMES KELLAWAY: You know all of a sudden here is a very trustworthy organisation suggesting that hey eggs are pretty healthy and maybe we should be incorporating them more in the diet. The egg industry has underestimated to a certain extent the level of demand that we're now seeing in the market place.

JENNIFER MACEY: Others blame the cooking shows for a surge in interest in baking and eating eggs.

Ivy Inwood is the Chairwoman of the Queensland Egg Farmers association.

IVY INWOOD: Have you noticed if you walk down the street, every second little café and that's got breakfast and it's eggs and bacon , you know I've been watching what's been happening over the last two years and people are just eating more eggs.

JENNIFER MACEY: The Australian Egg Corporation warns the shortage will increase the price of eggs.

But Ivy Inwood says these higher prices don't necessarily flow through to the farmers.

IVY INWOOD: When you deal with Woolworths and Coles and retailers you set your price for 12 to 18 months or two years, whatever; you don't get any increase because there's a shortage, because you're locked into that price.

JENNIFER MACEY: She says farmers have also struggled to adapt to the new regulations for poultry cages that came into effect two years ago.

IVY INWOOD: People have gone down into free range and not realised that free range is completely different to cage industry and you don't get the amount of lay out of the bird that you get out of the cage industry.

JENNIFER MACEY: But organic free range farmers disagree.

Ian Littleton from Clarendon Farms in New South Wales says farmers should be used to the new rules by now.

IAN LITTLETON: The change to the cage regulations have actually been in for a while and also they were obviously mooted many years ahead, so the majority of producers had already you know, undertaken to change the type of caging they were using to comply. People in the mainstream industries that I'm familiar with, they certainly have not cut back on their bird numbers.

JENNIFER MACEY: He's noticed consumers switching to organic eggs because of the shortage in the conventional market.

IAN LITTLETON: A lot of business, cafes and restaurants that we supply are also demanding more eggs as well.

Being organic our eggs tend to go into a more niche area, their more expensive, but there is a chance that the shortage of supply of conventionally produced eggs may also be having an impact on people just having to buy our eggs to keep their businesses operating.

JENNIFER MACEY: The egg industry says because it takes six months for a hen to start laying the crisis is not expected to be over until after Christmas.